"Rising Feb Rates A Sign Of Economic Confidence"

In spite of the current stock market rally, the focus is still on quality and the entire market will not start flying all at once

- Aashish Somaiyaa

The liquidity-driven market rally in India has made investors fearful of a massive and long-term correction. However, Aashish Somaiyaa, Managing Director and Chief Executive of Motilal Oswal Asset Management Company Ltd (MOAMC), thinks a down trend will not last long. In a conversation with Renu Yadav of Money Today, Somaiyaa discusses the current bull run, most lucrative sectors, earnings and returns, and why the US Fed’s rate hike may not affect the Indian market just yet. Edited excerpts:

Markets are now trading near lifetime high. Do you see a correction in the near future?

By philosophy, we at Motilal Oswal AMC are market/index agnostic, bottom-up stock pickers. So, at any time, we are more concerned about the earning power and valuations of some 15-20 holdings we have in our portfolios. Having said that, one can visualise a bit of a lull in the markets in the near term considering we have seen a significant run-up on a year-to-date basis and all triggers such as earnings season and rainfall predictions are now out of the way. There could be a potential upside if there is a surprise out-of-turn rate cut by the central bank. Even if there are no triggers, any decline in the markets is likely to be short-lived as both investors and funds are flush with cash.

What is your take on valuations of stocks across market segments?